Magazine

Coming Up Fast: Companies to Watch

From social networking star Facebook to India's fast-growing SKS Microfinance, here are five emerging companies to keep your eye on

Not all the companies suggested by BusinessWeek's Most Influential Companies advisory board were billion-dollar behemoths like Wal-Mart (WMT) or JPMorgan Chase (JPM). Many recommended up-and-coming stars—companies still expanding their global reach, building their brand recognition, or trying to unseat their industry's dominant player. That hardly means they aren't making their presence felt. Below is a sampling of our advisers' nominations for the most influential emerging companies in business.

LI & FUNG

Li & Fung is the matchmaker of the globalized business world. Based in Hong Kong, the 102-year-old consumer-goods sourcing company, which once represented Chinese silk and porcelain manufacturers, now helps retailers and apparel brands ranging from Toys "R" Us to Reebok find the best sources for clothing, toys, and accessories. As companies fret over slowing consumer spending, Li & Fung has had to clamp down on operating costs and has seen a slide in its shares. Still, the demand for a global supply chain isn't going to wane, and Li & Fung will be making introductions to its vast network of 10,000 suppliers for years to come.

FACEBOOK

It has helped elect a President, changed the way people communicate, and is altering the world of online advertising yet again. The popular social network, which now has more than 160 million members, could even end up being more influential than Google (GOOG), says Z + Partners founder Andrew Zolli, one of our advisory board members: "Advertising, media, and consumer-product development are all going to be influenced by social networking, and more particularly, by the ability to extract [relationships] from social networks," which are indicative of buying and selling patterns or patterns of how consumers influence each other. Still, Facebook is not yet profitable, and marketers say it needs to make campaigns easier to develop and manage before the site becomes an essential part of their marketing budget. As it seeks to expand more deeply into international markets—the site doesn't yet have a strong presence in Brazil, Germany, India, or Japan—Facebook's influence will continue to soar.

HCL TECHNOLOGIES

The info tech services provider specializes in everything from managing technology infrastructure to creating custom software solutions. Where it has the potential to be most influential, however, is not technology, but management. To help recruit the best engineers, the CEO of the Noida (India)-based firm, Vineet Nayar, has adopted an unusual philosophy: Management should be accountable to employees. He puts that into practice by publishing top managers' performance reviews on the company's intranet, installing a one-stop service desk for employees' problems on everything from laptops to bonuses, and posting answers to dozens of questions employees leave for him each week online. Several top technology executives have made the pilgrimage to HCL's (HCLT) headquarters to see Nayar's philosophy at work, and Harvard Business School professors already are teaching case studies about it. They have "a unique approach to management innovation and experimentation," notes IDEO CEO Tim Brown, one of our advisory board members. "That will be a model for the way many, if not most, companies have to think about management in the future."

CRAIGSLIST

There are many forces behind the downfall of the newspaper industry, whether it's advertising's flight from print to online or the rising cost of newsprint. But Craigslist, the online community for classified ads that gets more than 12 billion page views per month, has played no small role. Craigslist users post more than 30 million free classified ads a month, according to the company, and the service added 120 cities this year. In 10 of its cities, employers pay for more than 2 million new job listings each month. Meanwhile, classified ad buying at newspapers is rapidly falling: The New York Times, for instance, said October classified sales dropped nearly 35%. As Craigslist digs deeper into classified ad markets both in the U.S. and abroad—it's recently added sites for everywhere from Valdosta, Ga., to Ahmedabad, India—its impact will be felt even further.

SKS MICROFINANCE

Grameen Bank, the organization founded by 2006 Nobel Peace Prize winner Muhammad Yunus, may be the best-known practitioner of microfinance, or providing small loans and other financial services to the poor. But advisory board member Tarun Khanna, a professor at Harvard Business School, believes Hyderabad (India)-based SKS Microfinance could have even more impact. (Khanna is on the board of the organization.) For one, it's "unabashedly for profit," Khanna says, which means it's growing fast and plowing those profits back into building new systems and greater scale. SKS already has 14,000 employees and 3.5 million customers throughout India and is adding 300,000 new customers each month.